US Stocks rise on robust earnings and shrug off Commerce Sec Ross’s comments

US stocks trade higher, albeit in a choppy manner in early trade after a brief selloff stemmed from an overreaction to Commerce Wilbur Ross comments on CNBC on trade talks.  The move higher in equities was supported by a wrath of earnings painting differing stories among the 11 sectors.  The US equity market initially sold off before the open after Commerce Secretary Ross’s comment that the US is “miles and miles away” from a China trade agreement.  The markets however paid little attention to his optimism that he thinks there is a fair chance a deal will get done, just not this week.  The rest of the comments which emphasized the need for progress on intellectual property theft and structural reform are in line with his prior comments over the past month.  Sentiment is poor and the markets are overreacting to dire comments on trade talks.  The dollar is also modestly stronger against its major trading partners.

Earning results this morning where strong from the airlines and not so bad for technology companies.  Consumer discretionary stocks were flying higher after robust results from American Airlines, Southwest, and Jet Blue, although the uncertainty from the partial government could weigh on results in Q1.  The pummeled technology sector is showing the strongest gains today as results and the outlook from STMicro are helping some believe that semis could be poised to see a bounce in the second half of the year.  After the close we will see earnings from Western Digital, Intel and Starbucks, all showed signs of challenges last year and the bar is low for them to surprise.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya